Long term reforms need to be consistent

Compared to other countries, export of Vietnam in Q1 was positive. Photo: VIET CHUNG

“It is very positive to achieve 6.79% YoY GDP growth in Q1/2019 amid the high volatility in global economy. Although we are not totally happy with the export result, it still maintained at acceptable level in Q1/2019, reaching USD 58.81bn, an increase by 4.7% YoY. Compared to other countries, this export growth was a positive sign.

Less surplus in trade balance has created pressure on the foreign exchange market. However, contributions by the private sector in total exports has improved. We have been waiting for this improvement for a long time. The market price level is also under control.”

JOURNALIST: - What do you think about the current growth and what do you expect in the next few years?

NGUYEN ANH DUONG: - Firstly, we achieved the growth target in the first quarter. The other indicators like export, inflation, trade surplus are under government control. This is not only about reaching the target, but also about macro preparation for next few years. We do not set objectives just for 1 or 2 years, we look forward to next 5-10 years.

Secondly, we are under a very volatile global economy, the scenario analyzing or solution preparing activities should be done by proactively learning from partners such as Japan, Australia, New Zealand, Korea and EU. These are countries which have much experience in handling the shocks from outside. For example, the US-China trade war has been happening since last year, but Japan and EU have not changed their exchange rates. Vietnam should learn from them to create a suitable foreign exchange policy.

- Many people think that FDI companies are moving from China to Vietnam. What do you think about this issue?

The impact of outside elements is being evaluated and analyzed by the government. The prepared solutions for each scenario are also being considered with priority given to maintaining economic stability, creating conditions for reformation and improving the business and investment environment.

- Discussing with Vietnam association of enterprises, I know that investors are very interested in Vietnam, especially as they are seriously considering to move their investments from China to Vietnam. We should break these investors into two groups.

The first group are investors who have been comparing Vietnam to China to make investment decisions and these investors then quickly lean more towards Vietnam.

The second group are investors who are enterprises from US, Japan, Korea, Australia currently based in China. They are moving from China to Vietnam more and more to avoid the risks from US-China trade war.

Many experts think that Vietnam will be the most benefited country if US-China trade war happens. However, the real opportunity for Vietnamese enterprises is CPTTP, rather than the trade war.

Vietnam now is more involved in the global value chain. The competitive ability has also improved. These are the factors that will attract foreign investors moving away from China to Vietnam. The US-China trade war is not the key factor.

Some people think we should be careful with investors who move from China to Vietnam. However, in my opinion, we should not care much about the origin of the investors as it is not easy to clarify their place of origin. They can be registered as companies in a third, even fourth, fifth country before entering Vietnam. The key factor is to create a set of criteria and requirements for foreign investors to ensure their investments is attributable to Vietnam’s economy and to avoid any environmental and social risks.

- What should we specifically do to improve the business climate?

- Over the last 5 years, especially since the government issued Resolution 19 for the improvement of business environment, the reformation process has been speeding up. Vietnam has used international standards in evaluating necessary and enhanced improvements for businesses. Instead of comparing with Vietnam in the past, we currently compare Vietnam to global standards. If we do not apply international standards, we may fall behind other countries despite all our efforts. The reason is that other countries are moving faster than Vietnam, or we are slower than them.

This time, reforms in mechanisms, businesses and the investment environment has received the full joint attention of ministries and locals, and is not fragmented like before.

In 2018, we achieved many good results thanks to government efforts in improving the business environment and spurring the growth in the private sector. However, in the long term, the government should do the reform consistently with bigger effort to motivate the development of private sector, making it the key driving force of the economy.